The number of marine vessel strandings along the South African coastline should serve as a warning to local ship owners who are sending an underinsured or uninsured fleet out to sea. In time this could have a negative impact on the maritime insurance industry, Insurance Times & Investments (ITI) Online says.
Mike Brews, chief operating officer from Associated Marine, a division of Santam - South Africa's largest insurer - hopes that the publicity surrounding the grounding of Eihatsu Maru last week serves as a warning to the local maritime industry. "Although this particular vessel has been freed, the current bill for salvage operations sits at about R6 million," he says.
It is not clear whether the Tokyo registered vessel is insured or not. If not, the South African public will be held responsible for the tab. Local ship owners need to understand the potential consequences for their ships and their business if they are found in a similar situation without being fully insured. "A grounded ship without insurance, [as well as its cargo, can be arrested] until the debt is cleared or a guarantee is arranged. In the case that the debt is not cleared, the ship and its cargo can be sold to defray expenses," Brews warns.
According to ITI Online, Brews warns that the South African maritime salvage industry may be influenced negatively by the increase in the number of strandings along SA's coastline. The tugs involved in marine salvage are faced with special risks in the course of business and therefore must be fully insured. "Part of the rating process of salvage vessels takes into consideration the average number of salvages likely per year and the risk and the potential for damage ... If the risk of exposure to these types of incidents is on the rise, the local industry may feel the knock-on effect," Brews concludes.
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